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1. STATE OF NEVADADEPARTMENT OF TAXATION
2. All tangible personal property is taxable unless specifically exempted by statute
Repair labor is considered
a service and not subject
to tax unless parts and
labor are not segregated
and then the whole
invoice is subject to tax!
3. Separation of Charges on Invoice
Charges for tangible personal property AND
Charges for installation/repair labor
MUST be stated separately
OTHERWISE….
on the invoice will be subject to sales tax!
4. Repairing & Reconditioning in general Repairmen are retailers of parts & materials if…
The value of the parts/materials is SUBSTANTIAL in relation to the total charge
Example: Total Charge = $1,000
Part value = $ 750
Parts must be separated and taxed. If there is no separation of the charges, then the entire invoice is subject to tax!
5. Repairing & Reconditioning in general Repairmen are consumers of parts & materials if…
The value of the parts/materials is INSUBSTANTIAL in relation to the total charge and no separate charge is made for the parts/materials. If material IS separately stated, then the repairman MUST charge sales tax on the material.
6. Repairing & Reconditioning in general Example: Total Charge = $100
Part value = $ 5
To be considered a consumer of parts/materials used in connection with repairs, the repairman must pay the tax on the purchase of the materials/parts.
7. Repairs/ReconditioningMotors and Transformers Materials & supplies furnished in connection with the rewinding of motors and transformers:
--If one charge is made for both materials and labor…….
-- of the charge shall be deemed to be the sales price of the materials/supplies and will be subject to tax
8. Repairs/ReconditioningTires Tire retreaders/recappers are RETAILERS. If one charge is made for the retreading/recapping…..
of the charge
shall be deemed to be
the sales price of the
property
9. Fabrication Labor Labor used to
……….change tangible personal property to another form and billed in a retail sale…..
10. Refurbish Labor Labor used to refurbish an item of tangible personal property to restore or refit it for the use for which it was originally produced………..
11. Painters, Polishers & Finishers Charges for painting, polishing & otherwise finishing tangible personal property in connection with the production of a finished product for consumers, regardless of whether the article to be finished is supplied by the customer or the finisher
12. Painters, Polishers & Finishers Charges for painting or finishing real property
13. Painters, Polishers & Finishers Charges for repainting or refinishing used articles
14. Delivery Charges Effective May 22, 2009 charges for transportation, shipping or postage are no longer subject to Sales & Use Tax if they are separately stated on the invoice.
Exceptions:
>>If a delivery fee is charged for shipping a motor for repairs, and it is charged for shipping the motor back, generally that fee is not taxable as it is NOT associated with a sale of tangible personal property.
15. Replacement Parts
Sales and Use Taxes do not apply to the purchase of replacement parts if the repairs are pursuant to the provisions of a warranty or guaranty if the warranty or guaranty was originally taxed as part of a sale
16. Absorption of Tax Taxpayers CANNOT advertise they will pay the sales tax
Taxpayers CAN state that “sales tax is included….”
If there is no such statement on the invoice or a sign that sales tax is included, then the sale is subject to tax on the entire amount of tangible personal property
17. Summary Repairmen are retailers
>If Parts substantial, separate the charges or all taxable
Repairmen are consumers
>If parts are insubstantial & not separately stated
Fabrication labor is taxable in a retail sale
>But not taxable in a contract for improvement to real property
Repair labor is not taxable
> but, repair charges must be separate from parts
18. Summary Repair to motors/transformers – 50% rule
Retread-recaps – 75% rule
Refurbishing – labor not taxable
Painting real property – use tax on material only, labor not taxable
Painting/refinishing used property– use tax on materials only, labor not taxable
19. Summary Replacement parts under warranty-no tax if warranty was taxed
“We’ll pay your tax” ----
20. Written Response Most tax issues can be addressed by the Department of Taxation. Please be advised that any responses to inquires made to the Department are only binding if put in writing, such as Nevada Revised Statutes, Administrative Code, Nevada Tax Notes, or in written correspondence.
21. DEPARTMENT OF TAXATION Contact Information Our offices are open Monday-Friday 8:00 AM – 5:00 PM
22. MORE QUESTIONS?
Department of Taxation website: http://www.tax.state.nv.us/
Taxpayer “What You Need to Know” questions and answers
Nevada Tax Notes
Copies of blank returns